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When Moshe Tamssot walked out of a Chicago hackathon in August 2010, he had a new business and a new business partner.

Most hackathon attendees go just to have fun, of course, and that's been enough to establish hackathons as a part of tech culture. While the likes of Google and Facebook have used them to promote their APIs and entire 'ecosystems,' smaller firms are also adopting hackathons -- and swear by the results.

Hackathons, of course, are organized marathon hacking sessions with rules, goals and prizes. Conceptually, they are reminiscent of county fairs, except what's submitted to the judges was created during the event. Hackathon organizers could be hoping to get developers to play with a new interface they are introducing, or write apps for a new phone they are producing -- or the idea might be to just have fun, with no particular agenda.

Sponsors are typically corporations, user groups or student organizations. Prizes are often awarded for best design or best use of technology. The word "hackathon" can be traced to 1999, but sources agree that the practice itself goes back at least another decade.

Hackathons can be divided into two main types: live (where participants come together at a set place for a scheduled period) and virtual (where the event is held online usually over the course of a month), says Peter Morano, who has produced about two dozen live hackathons in the Chicago area over the past three years. By day he is the director of technology at TrainSignal Inc., an IT training firm.

Hackathons for fun and profit

Experts' tips for how to get started:

Decide what purpose the hackathon will serve: To develop working prototypes of potential new products, or to serve as encouragement to help employees bond and bring ideas to the forefront, for instance.

Decide who will participate -- employees only, or local indie programmers, or both.

If external developers are involved, give some thought to intellectual property issues -- who owns the resulting code.

Figure out the duration of your hackathon, from a day to a week.

Recruit judges who are well-known and respected in the local tech community.

Make sure the rules and judging guidelines are clear -- what the categories are, for instance.

Make sure to offer prizes and have plenty of food.

Acknowledge all the participants and the winners, on your corporate intranet, say, or in the employee newsletter.

Morano, however, discounts virtual hackathons, complaining that they don't generate any excitement or sense of community.

Hackathons otherwise can also be divided into internal and public types. Internal hackathons involve only employees of a particular enterprise, while public hackathons are open to all comers.

Internal hackathons, explains Morano, are intended to encourage members of the rank-and-file to bring their ideas to the forefront. "The people standing at the whiteboard coming up with the ideas are not necessarily the people with the best ideas, and they want to hear from those who would not normally be heard from," he says.

"They work 8 to 5 on their assignments backlog, but in the back of their heads they have great ideas that they never have time to work on," adds Basharat Wani, director of software development at the Blacksburg, Va., location of cloud computing vendor Rackspace Inc. The facility holds a 24-hour internal hackathon about every six months. Of the 80 engineers at the facility, about half participate, he notes.

For either kind of hackathon, the producer sets the award categories and provides prizes, a meeting space (often a cafeteria-like setting) with Wi-Fi and often projection screens and food that is available throughout the session (pizza is the typical fare).

Participants provide their own technology, sometimes wheeling in high-end systems with multiple displays. The participants are also expected to bring their own software tools and any other technology they intend to use. It's assumed that participants haven't built anything prior to the start of the event, when they receive the judging guidelines.

Decision points

For live hackathons, the most important decision is how long it's going to last, Morano explains. One-day hackathons usually start on Saturday morning and finish Saturday evening. Two-day hackathons start Saturday morning and finish Sunday evening. Three-day hackathons start Friday afternoon and finish Sunday evening.

One-day hackathons are much easier to produce, and will draw three times as many participants as the longer types, as more people are willing to give up one day as opposed to two or three days, Wani says. The organizers also need to provide less food and don't need the meeting space as long.

On the other hand, "You will get a lot more mature applications with longer events," he notes. "Eight hours is not practical to get a fully baked item -- you will get some concepts and wireframes. But after an overnight session I have seen working apps. After 48 hours everyone has something to show."

West Monroe Partners, a consulting firm headquartered in Chicago, has an internal hackathon about once a month. But, since most participants aren't interested in giving up a Saturday every month, managers limit the event to a few hours in an afternoon, starting at either 5 p.m. Wednesday or 3 p.m. Friday, explains Dan Rosanova, senior architect at the firm.

Eight hours is not practical to get a fully baked item -- you will get some concepts and wireframes. But after an overnight session I have seen working apps. Basharat Wani, Rackspace

After deciding the schedule and location for the event, the next big decision is who will do the judging. "The key is to get local celebrities, well-known in the local technology community," Morano notes. "You need judges that attract people, people who are influencers and have followers. Often, the most exciting thing for participants is to present their idea in front of a local CTO. The trick is to recruit those people."

The prize categories will usually reflect the agenda of the organizers. But offering prizes for the winners isn't enough -- there must also be "swag" (knickknacks as consolation prizes). T-shirts are popular, and technical publishers will often agree to hand out promotional merchandise, Morano says.

A good turnout for a regional public hackathon with several thousand dollars of prize money would be 60 to 80 people, Morano says.

Self-organization

Participants can work alone or in teams. They can show up in teams, or find teammates upon arriving. The latter situation generates the most energy.

Team consist of up to four people, Morano says, adding that he has never seen teams larger than four, and that the members would probably step on each other if a team were larger.

They form around roles, with a sweet spot of two or three. An example would be a designer and a developer; or a designer and two developers; or a designer, a business person with the idea, and a developer, he says. (In the last case the developer creates the software, the designer creates the interface and the non-technical person does the presentation, he notes.)

"The rule is that you need a programmer or developer, a hustler or business person who can sell, and a designer who can make things look beautiful -- because this is not the old days anymore when you could have ugly apps," Tamssot says.

When picking a team, "Focus on people, not ideas," urges Tamssot. "Find people you are compatible with and who can complement your skill sets. At a hackathon you can have real-life experience with potential partners in situations where they can't fake anything. Some members of our original team were not really committed, but it was great to separate the wheat from the chaff. There were a couple of members that I would never work with again."

"Stress reveals character, it does not create character," Tamssot adds. "A hackathon, meanwhile, breeds the culture that the last minute is the best minute, for those who love the rush of adrenaline."

While the entrants usually organize themselves, in some cases playing matchmaker for the participants is the main point of the event.

For instance, POV, the long-running PBS documentary program, holds periodic two-day hackathons to explore the ways technology can be used for storytelling. "We are giving technologists access to filmmakers, and giving those storytellers access to technologists," says Adnaan Wasey, POV's digital director. POV plays matchmaker with applicants, who might not have met prior to the event.

Wholesale adoption

An example of an enterprise that has integrated hackathons into its business practices is Dropbox Inc. in San Francisco. The cloud storage and file synchronization firm has two hackathons per year, each a week long, explains software engineer Max Belanger.

"Everyone in the firm was given five full days to tackle any project they want," Belanger explains. "You can work on your own or in a team, and the only rule is that by participating you have to be willing to present your work." Since participation involves prestige that comes with recognition, employees take part willingly, he says.

The event, called Hack Week, is held in January and again during the summer. As many as 300 employees participate, and they are encouraged to commit to a project in the weeks leading up to the hackathon. If materials are needed, they are handled on a case-by-case basis through the usual corporate procurement process, he adds.

During the hackathon food is available 24 hours a day, but participants aren't expected to work through the night.

Even the CEO has been known to commit to a project, and the sales department will also participate, typically creating a sales tool, Belanger says. The Dropbox password-strength meter and its two-party authentication process originated from Hack Week, he adds.

Intellectual property issues

But with random people being asked to create something original and useful, what if they actually succeed? The issue of intellectual property (IP) appears to be a gray area.

Margaret Hagan, a Pittsburgh resident and a Stanford law school student, says she had been to six public hackathons in the last year without hearing any discussion of IP. "The worst case is that there has been no serious discussion of IP, funding does come through and team members start coming out of the woodwork," she says. "There needs to be a frank conversation about the ramifications of going forward."

Morano shrugs off the issue. "I have never encountered a situation where IP was in doubt," he says. "But as soon as you ask people to sign something with legalese, a huge proportion will not show up. They are supposed to give up a weekend to have fun, not bring lawyers into it. Anyway, most of the stuff that comes out of a hackathon is not commercially viable, and will require months of additional work."

The situation at internal hackathons might seem clearer, since the IP was created on company time. However, non-employees are often invited to participate. At Dropbox, for instance, invited outsiders can take part in Hack Week, and non-disclosure agreements are used to protect the corporate code base, Belanger notes.

At Rackspace-Blacksburg, outsiders can take part in the internal hackathons but since open-source software is used, intellectual property hasn't been an issue, says Wani.

Rosanova says that intellectual property hasn't been an issue at the West Monroe Partners' hackathons, either, largely because those hackathons last only a few hours. "If we spent the weekend, they might come up with something unique, but there's little risk of that in a few hours with a technical subject," he says.

At POV's hackathons, Wasey says he makes the teams decide how to handle it, while POV claims no ownership.

Results

Back at that Chicago hackathon in 2010, Tamssot told the other team members that "I was not interested in an app but in a new business," he recalls. "That gave us a focus to create something viable, and not just demonstrate a technical skill. We started with different ideas that were all shot down, and then I suggested something food-related."

The result was an app called cookie-bot, which allows anyone to replicate a recipe using not only cooking instructions but data about the oven, altitude and other environmental conditions. The team pulled the app together in 48 hours using the Appcelerator multi-platform coding tool, and won best-in-show. A month later, the team was invited to demonstrate its creation at the Techweek Chicago technology conference.

In the meantime Tamssot and company upgraded the app to CookItFor.Us, a service that lets the user get a dish made by a professional chef and delivered fresh anywhere in the world. The team was then accepted into a 90-day program in the Excelerate Labs (now Techstars Chicago) business accelerator.

In the end, Tamssot and his team decided to bootstrap rather than seek investments, and have expanded the service to MakeItFor.Us, which will get pretty much anything made for a client, from children's toys to a wine rack, backyard pond and dog house -- in addition to food.